RELEASE: Speed Trap: Big Oil Profits from High Gasoline Prices

Washington, D.C. — The Center for American Progress today released “Speed Trap: Big Oil Profits from High Gasoline Prices,” which shows that in 2012 BP, Chevron, ConocoPhillips, ExxonMobil, and Shell made a combined $118 billion in profits—and used billions of these dollars to buy back their own stock and lobby Congress—while collecting on special tax breaks and producing less oil. Meanwhile, American households spend nearly 4 percent of their pre-tax income for gas.

This column digs deeper into the big five’s latest earnings—including how they spent them—and explains why companies this profitable should not be receiving billions of dollars in special tax breaks—especially while conservatives plan severe cuts in vital middle-class programs such as Medicare and those devoted to education and cancer research.

The big five oil companies invested nearly $50 million of their abundant bounty in lobbying Congress in 2012. They spent nearly $8 million on federal campaign contributions, with Republican candidates receiving $4 for every $1 Democrats received. A major goal of these political efforts was to retain Big Oil’s special tax breaks, which are worth $2.4 billion annually, according to the Congressional Joint Committee on Taxation. Last March Big Oil successfully lobbied against a Senate bill to eliminate the special tax breaks. The bill was defeated by a vote of 51 to 47, with 60 votes needed for passage.

Maintaining the existing special tax breaks for the big five oil companies makes little sense. In essence, the policy allows Big Oil to force Americans to pay them twice: first at the pump through high gasoline prices and then again by robbing the U.S. Treasury of $2.4 billion annually—money that is replaced with tax revenue from the middle class. After posting enormous profits in 2012, elimination of these unnecessary special tax breaks for the five largest oil companies is long overdue.